ADS Example
In October 2007, a calendar-year corporation purchased a building for $150,000. Thirty-thousand dollars was attributable to the cost of the land. Under the MACRS formula method, the 2007 depreciation allowance is computed as follows:
|
$150,000 - $30,000 39 |
= $3,077 Annual MACRS recovery |
|
2.5 x $3,077 |
= $ 641 2007 depreciation allowance |
If the corporation elected the ADS straight-line MACRS method, the 2007 depreciation allowance is computed as follows:
|
$150,000 - $30,000 40 |
= $3,000 Annual MACRS recovery |
|
2.5 x $3,000 |
= $ 625 2007 depreciation allowance |